Owego mayor struggling to gain support for Inflection deal

Jan. 10, 2011

Written by

VILLAGE OF OWEGO -- A proposed deal to sell treated wastewater from the Village of Owego to a natural gas company may not have the necessary support to pass, Village Mayor Edward Arrington said Monday.

The village has been entertaining an offer from Inflection Energy to sell up to 200,000 gallons per day at 5 cents a gallon to the Denver-based company. The 10-year deal could have the potential to double the village's revenue, which is about $3 million annually. The company would be under no obligation to purchase a minimum amount of water.

"I don't know if we're going to have a contract," said Arrington, who has been leading negotiations with Inflection. "I haven't been able to muster the votes to pass it."

The offer is being reviewed by the village under the State Environmental Quality Review process, which is used to determine whether a proposed project will have a significant adverse effect on the environment.

The village board of trustees voted in December to obtain outside counsel to complete the review before voting on the offer. It was formally presented to the board earlier that month, but the trustees voted to table it.

The company would use the water for potential hydraulic fracturing operations, a gas-stimulation technique that uses millions of gallons of water mixed with sand and chemicals to fracture shale formations and release natural gas. As it stands, the village pumps the water from its treatment plant into the Susquehanna River.

The village has been criticized by anti-hydrofracking groups and some village residents because no contract proposal has been made public. Rather, Arrington has communicated the financial aspects and some other terms at village board meetings and through the media.

A request made by this newspaper under the Freedom of Information Law for any contracts or contract offers between the village and Inflection was rejected by the village because there is no signed document, and any offers are "considered attorney work papers and are attorney/client papers."

Robert Freeman, executive director of the New York Committee on Open Government, said such contract proposals are exempt from the disclosure law only if making them public would impair negotiations.

"In a situation like this, where there are only two conceivable parties and the records have gone back and forth between the two sides and there is no 'inequality of knowledge,' how could disclosure impair the process?" Freeman said. "How could disclosure place either side at a disadvantage?"

Freeman also took issue with the assertion that the offers are attorney/client papers.

"If the attorney prepares whatever it may be and it has not been disclosed to anybody except the client -- in this case, the village board -- I would agree that it's privileged," Freeman said. "But whenever it's disclosed to a third party -- in this case, the company in the negotiations -- there's no privilege."

Village Attorney Irene Graven, who advised against the release of any documented offers, did not respond to repeated attempts to contact her at the village office.

Arrington said the deal is still being negotiated, and the public release of any working copies of the proposed contract could put other municipalities who may want to sell effluent wastewater at an advantage. He pointed to negotiations with labor unions, which are traditionally done out of the public eye.

"This is no different than any other contract," Arrington said. "I don't release the union contracts until my board and the union agrees. If they don't agree, I don't release it because I don't have a contract."

Still, some say the details of any offer being considered by the board are important and should be released before it gets to a vote.

"What is the purpose of allowing citizens to observe the authorization of a contract between two parties ... if the public is barred from reviewing the document the village is authorizing?" Helen Slottje, managing attorney of Community Environmental Defense Council, wrote in a letter to Arrington and the village board.

Trustee Jim Legursky said he supports the concept of selling the treated wastewater, but said he would vote against the offer in its current form because of how it's written, declining to elaborate since the document hasn't been released.

Legursky said he's seen three drafts of the proposed contract.

Arrington said the potential revenue from the deal would be used to upgrade the village's wastewater treatment plant in accordance with the U.S. Environmental Protection Agency's plan to clean up the Chesapeake Bay watershed, which includes most of Tioga County.

"We have the potential to get $36 million over a 10-year period, and I have so many people saying it's a bad deal," Arrington said. "Last I looked, if you've got something that you're throwing away and you find a way that you can benefit your taxpayers, it's something I ought to do."